New Argentinian President Plans to Make Sweeping Changes

President-elect Mauricio Macri won Sunday's runoff election against Daniel Scioli on a platform of free market principles and spending cuts, according to the Los Angeles Times. His election marks the end of Kirchnerismo, which encompasses 12 years of leftist political thought helmed by President Cristina Fernandez de Kirchner and her late husband, former President Nestor Kirchner.

However, Macri plans to leave in place wider social programs that expanded under Kirchner's tenure, such as subsidies for senior citizens and education. Macri was a civil engineer who rose to prominence when he became president of the soccer club, Boca Juniors, and his two-term win as mayor launched him into front-runner status for the presidency.

The new president may possess a reputation for generosity when it comes to social welfare, but he remains the polar opposite of the current president. First, relations between Venezuela and Argentina may be in jeopardy because he criticized Venezuelan President Nicolas Maduro's crackdown against opposition members.

He also advocates suspending Venezuela from an important trade bloc agreement. Macri wishes to roll back certain measures, such as Kirchner's high-rate tariffs that protect local economies. He also garnered a great deal of support from farmers who have become weary of Kirchner's protectionist policies that closed off Argentineans from international markets. Macri proposes changes to the government's current policy of exchanging pesos and dollars that are well below black market value.

The Argentine peso trades at 9.5 to the U.S. dollar, while the black market value totals 16 pesos, notes the Associated Press. With that, Argentina only has $26 billion in foreign reserves, which would not be enough for people to trade in pesos for dollars. Officials need more dollars to, not only keep up with demand but also, to sustain the overall economy.

Macri is willing to make vast changes across the board, but how much he can do remains a mystery. Many congressional members supported Kirchner, with her son serving in Congress, and they will not prove receptive to the new president's right-leaning politics. For example, only Congress can approve actions pertaining to the country's national debt, a point of contention under Kirchner's government. Argentina has been at odds with U.S. creditors and has ignored rulings from U.S. courts to honor debt payments.

Macri will inevitably come in conflict with Congress, but he has key allies with ties to Wall Street in his cabinet. For instance, he appointed Alfonso Prat-Gay, a former Wall Street banker and economist from Pennsylvania University. He also gave Francisco Cabrera the post of industry minister, but he will serve at a later date.

Cabrera worked for HSBC and Hewlett Packard. Many other cabinet members were either educated in the United States or worked for U.S. institutions, but only time will tell when it comes to gauging the extent of U.S. influence on the Argentinian government. Macri officially takes office on December 10.

Professor at Columbia University. Recipient of the Nobel Memorial Prize in Economic Sciences in 2001 & the John Bates Clark Medal in 1979. Author of "Freefall: America, Free Markets", "The Sinking of the World Economy", "Globalisation and its Discontents" & "Making Globalisation Work".

Chancellor of the Exchequer of the United Kingdom from 1992 to 2007. Prime Minister of the UK between 2007 and 2010. Inaugural 'Distinguished Leader in Residence' at New York University. Advisor at World Economic Forum

Dr Steinbock is an internationally recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among all major advanced economies and large emerging economies. In addition to advisory activities (www.differencegroup.net), he is affiliated with India China and America Institute (USA), Shanghai Institutes for International Studies (China) and EU Center (Singapore). For more, please see http://www.differencegroup.net/. Research Director of International Business at India China and America Institute (USA) and Visiting Fellow at Shanghai Institutes for International Studies (China) and the EU Center (Singapore).